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FOX Business After the Bell

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Us 16, U.s. 9, Apple 6, Europe 5, Washington 4, Sam 3, Humana 3, Chico 2, Scott Bauer 2, Samsung 2, Macy 2, Ecb 2, Liz Macdonald 2, Aig 2, Gm 2, Biden 2, Legalzoom 2, America 2, North Dakota 2, Pandora 2,
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  FOX Business    FOX Business After the Bell    News/Business. Stock  
   market updates. New.  

    September 7, 2012
    4:00 - 5:00pm EDT  

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infrastructure project. of course when one good piece of news comes, the whole part of this whole sector is doing pretty well. nicole: investing over 150 billion dollars on rails and roads and so we saw coal and steel moving to the upside. new highs for apple amazon just to name a few. [closing bell ringing] david: this is one of those days when the overall indexes don't necessarily tell the whole story because there's some individual stocks that are doing some incredible moves. liz mentioned one in healthcare. we will be talking about pandora coming up. what is going on with amazon? and gold, gold, gold, let's take a look at how all the indices -- oh look at that, we are all in the green here. again, not by a lot, but it's the behind the scenes stories that we're going to get into the next hour. all the indices in the green, not a bad way to end the week, even though the jobs number was a terrible way to end the week on the economy. liz: tough for the markets to make that decision to move higher but right now looks good. coming up, we will be looking ahead to what today's jobs report means for next week's
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federal reserve meeting. we've got a panel of experts to tell you what it all means for your money. david: also we have the ceo of a company that says the european banking crisis is actually helping his business. that ceo is going to explain why in a fox business exclusive. you don't want to miss that. liz: first we will tell you what drove the markets today with today's data down load. stocks ending the session little change but we will take it higher. materials and energy best performing sectors while consumer staples lagged. all three indices ending the week higher with dow posting its best weekly gain since -- we never see this; right? best weekly gain since july at least in september. and the s&p heading with its highest weekly gain since june. the u.s. economy, let's get to that jobs number. it was a disappointment. they did add 96,000 jobs in august but it is short of economist expectations. the unemployment rate fell to 8.1% from 8.3%. the decline in the jobless rate though is not necessarily good news. however, because it reflects
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368,000 people giving up, dropping out of the labor force. and the metals market, you heard nicole just talking about this, seeing huge moves today on hopes that the federal reserve will announce more stimulus. you had a much weaker dollar, so gold, we had copper skyrocketing, silver, but look at gold, ending the session up $34.90 to end the whole week at $1,740 a troy ounce. that's as high as -- that's its highest close in six months. copper also saw a pop rallying 3.7%. david? david: i have a couple of gold coins myself. we have scott bauer at the cme group. we have tim hollin still bullish on the market. let's start with scott at the cme. scott, first of all let's talk about gold. putin by the way he's been stocking up on it. i hope you have too. $1800 an ounce sounded like a long way away last week. this week, it sounds like we're right on the edge of it, no?
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>> oh it sure did. and this has been one of the biggest momentum plays over the last year. you know, when it moves like this, and then news like this morning with the bad jobs report and a weaker dollar, this thing definitely has potential to head back to 1800. its recent high. probably happen sooner rather than later. but, you know, this is the momentum trade, and these guys and all the traders i know, they don't want to buck this trend. this is big-time to get on the backs of this one. liz: but we have got to clarify this, when you are talking about the momentum trade, so much of today's move had to do with the weaker dollar, when the fed appears to be poised to jump in, that usually weakens the u.s. dollar. does it not? >> oh, it absolutely does. and we'll see what they have to say next thursday. there's 3 1/2, 4 more trading days until then. but right now this is -- i don't want to say a freight train out of control -- but this is a marketplace like we saw, you know, six, nine months ago, where people just jumping on the
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bandwagon right now, you know, qe 3 now really is in front of everybody, and this thing is going to ride higher. david: but scott since everybody has planned it in for next week, what happens if it doesn't? i mean okay say it does happen, but what happens if it just comes to expectations, that is if the fed just does enough, is it conceivable that we could have the bottom drop out of this market and the gold market as a result? >> you know, i don't think it's going to drop out of the equity market. you may see it in commodities. i wouldn't say the bottom dropping out. but i would see a little pullback there. but this equity market, you know, yesterday we didn't know about the jobs number today. and we had the -- [inaudible] -- yesterday. right now there's still so much money on the side lines that has to come into this marketplace, i don't think this rally in the equity market is going to stop any time soon. liz: let's bring in our bull and bear. we have tim holland who is our bull and kevin gettis who is our bear. tim, i will begin with you
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because it is a little challenging to be a bull right now especially with a disappointing jobs number. what is behind your bullishness now? >> to pick up on the prior guest's last comment, there is a tremendous amount of money on the side lines. this is an asset class that's been sold by investors for five years now and you talk to people and you tell them the market is up low double digits mid double digits and they look at you like you have three heads, no one seems to believe this rally. and so from a fundamental perspective, the way we look at things, there's a tremendous amount of money on the side lines, the housing market we think bottomed sometime in the back half of last year so what was a headwind is now a significant tail wind and back to monetary policy, you have not just the fed but the ecb, over in china as well, any central bank of any importance just creating tremendous amount of liquidity which along with we think still a constructive valuation and fundamentals, all those things are a positive for u.s. stocks. david: kevin, you are a fixed income guy. say you don't want to be in
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stocks because you think it's topped out, but you don't want to be all in cash either, because you're not quite that cautious, where do you go? >> still like the muni bond sector, david. it looks like, you know, on a relative basis, taxes aren't going lower. they are probably either going to stay the same or go higher. on a relative basis, taxable equivalent yields that come from municipal bonds are a great investment. taxable municipal bonds are even better investment, better than corporates, default rates are lower, i think there's a great investment still left. you may be too low a tax bracket for it to matter, in other words, to achieve something in a taxable equivalent basis that's better than corporate bond, you need to be in at least 30% tax bracket. below that you would probably look alternative to corporates which would be taxable municipal bonds. liz: looking at equities, do you pick names or sectors. >> what do you like right now?
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>> we're stock pickers and we focus on companies that possess a sustainable competitive advantage. there are two that fall in that domestic sort of american economic renaissance conversation. one would be macy's, largest department store operator in country. and the other would be chico's which is specialty apparel retailer. both are led by management teams executing multiyear very thoughtful turn around programs focused on merchandising and improving the customer experience. and in our experience, liz, we think the american woman, the american mother is the last person to come back to the stores, and that's because she tends to be responsible for her household's finances, tends to be a bit more conservative, puts her family first, and we think she's finally coming back. and if you look at the same-store sales numbers out of macy's, chico's, we think even with weak jobs number the u.s. consumer is in pretty good shape and the american mother is finally coming back to companies like those two. david: tim i like your focus on
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the small side. even on financials you go small side with glacier bank based in montana. why glacier? >> it's a fantastic bank. never cut the dividend. never took tarp. yields over 3%. lived with some really tough real estate markets with boise and jackson hole wyoming pretty famous ski town out there. most recent quarter david they grew their loan book for the first time in over three years and reported record net income. if you think real estate is back and u.s. economy in fits and starts is back well capitalized and well managed banks will probably do pretty well the next couple of years. david: kevin is not absolutely sure housing is back, are you kevin? still looking at inventory. >> i think that housing certainly making a rebound, but the real focus would be on existing home sales as we start to see inventory decline, then i will buy into it, but right now even with the shadow inventory on bank balance sheets, housing has a little ways to go. liz: does the fed move next week
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or not? >> i think they absolutely do. kind of in back in a corner to do this. number below 100,000 is going to have a qe 3. david: the question is how much? thank you very much both of you. liz: we have the ceo of an executive recruiting firm who is here to talk about what impact management is having on the employment picture right now. david: also, does today's report change the political landscape? we are live on the campaign trail where all the presidential nominees are viewing the numbers. liz: a new study that finds nearly a trillion dollars a year is being wasted in healthcare in the industry. we will tell you where coming up on after the bell. [ male announcer ] what if you had thermal night-vision goggles,
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david: shares in double digits today with lulu lemon. liz: let's head back to nicole
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petallides. nicole: these are stretchy yoga type pants. i have a pair in my gym bag right now. sometimes on fox we talk about a car we should show the car. now we will show you the pants. these yoga pants the truth of the matter is they run roughly $100. lu lu's stock was out of favor for a time but now they are talking about better profits and boosting outlook. with that the stock seared today -- soared today up 12 1/2%. that's a nice year to date chart. david: 100 bucks for a pair of gym pants? liz: i'm way too cheap for lulu lemon. nicole thank you very much. let's go back to scott bauer at the cme group looking in to what appears to be what kind of session on monday. >> you know, this is a recurring story here. guys back here, they don't want to be short. they don't want to be short this market. with the way the vix has come down yesterday and today, volatility and protection is so
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cheap now that these guys can stay long their future ifs they want -- futures if they want, buy some down side protection, but these guys don't want to be short. there's just -- like i said earlier, the momentum in this equity market, not only the gold but in the equity market it is still to the upside. there's so much pressure on the upside right now. especially the ecb is, you know, temporarily out of the way and everything -- all the other news with the exception of that jobs number this morning, which just got counterabouted by the fact -- counterabout act -- counteracted by the fact that thursday we may see something from the fed. nobody wants to go into this weekend with expectations that we might back off. i think we're going to see this rally continue on monday. we will take it from there. liz: the dow closed at its highest level since 08. don't fight the tape. we can see it over and over again. scott have a good weekend. thank you very much. >> thank you. david: today's jobs report was not pretty. now we have the ceo of an executive recruiting firm with
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some ideas on what's really wrong with the employment picture. jim drury, james drury partners he joins us now. good to see you. thanks for coming in. what bothered me the most was the labor force participation, these people just leaving. we now have the lowest labor force participation rate since 1981. it's at 63.5% labor participation. is that one of the things that bothered you the most? >> oh absolutely. i think that there are a lot of people that seriously want to work, but only so many times you can go up to bat and get rejected because there are a lot of people looking for jobs with not many jobs to be given. david: there's also the fact for the past four or five years now, the corporate strategy has been to cut costs, get rid of debt, and cut the workforce. i mean, the main way that they have cut costs is by cutting the workforce. any sign in the boardroom that that is going to change? >> well, i think that there are a lot of cost challenges in corporate america. i know that commodity costs are
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very high. gasoline costs are very high. a lot of companies depend on that so the things they can control they are going to probably continue to manage closely in order for their bottom line and create shareholder value. david: manufacturers probably more than any other sector looking for ways to cut costs in labor. doing more automated services etc. to try to cut back on their labor force. manufacturing is really where the labor market is shrinking most. >> we've always been a manufacturing economy for years we have gradually progressed to a service economy, but i don't think anybody ever predicted that in the growth in jobs, 85% of them would come from the service economy and 15% from the manufacturing economy, and in the manufacturing economy is dead in the water right now. david: so since service economy depends so much more on labor force, is there way to expand that to the point where it could offset the losses in manufacturing? >> absolutely, but you don't hear the political parties talking about investing in the service industry.
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i think the service industry -- david: it's all about gm and manufacturing. >> all about saving gm, one big company but thousands of manufacturing companies hurting. but the service industry and the small businesses in america, 92% of the growth came from businesses of less than 500 employees. david: let me put a fine point on that. 92% of growth last year came from companies with 500 employees or less. so we really do have to now rely on the smaller companies more than ever before for job growth. >> small service companies are where we ought to be putting our investment dollars. david: now you say we ought to be putting our investment dollars. what do you mean by that >> i mean when we start talking about regulations and tax financing or whatever, that we really recognize that all these other things are maybe more visible, saving gm as they say, but i think you've got to put it where the growth is, and service is where the big jobs are coming from. david: a lot of these small companies are subchapter-ss and others that take their income as individual income take their
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profits, if taxes go up on those people making more than $200,000, they are going to be affected directly. >> i have a company exactly like that. david: you are a subchapter-s? >> absolutely. we're growing significantly right now. we're expanding -- growing at about 100% a year. david: wouldou be hiring fewer people if your tax rate went up? >> no, i don't think so because i'm interested -- if it got to the point that i didn't have the money to hire then because of taxes yes, but right now i'm investing in the growth of our company for the future. but not everybody is as fortunate as i am to have the kind of business i'm building. david: great to see you, thank you very much for coming. >> thank you david. enjoyed it. liz: one company is flying high. they say they have the european banking crisis to thank for it? you heard me correctly. the ceo of aircraft leasing company air castle joining us coming up. plus wait until you hear how much the healthcare industry is wasting each year. this is depressing. believe it or not, it's more than the pentagon budget. liz macdonald joins us with that story. that's next.
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david: as the election campaigns enter their final two months healthcare is sure to take center stage and stunning new report about the incredible amount of money wasted in healthcare could add ammunition to both sides of the debate. liz: we put liz macdonald on the case. she has details. it is tough to hear but go for it. >> here are some numbers, 750 billion dollars, now this comes -- david: a year? >> a year. this is waste in the healthcare
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system. this comes from the institute of medicine. it is a nonpartisan group affiliated with the national academy of sciences. so the worst offenders here you are going to see unnecessary services, you know, excess of administrative costs right there, 190 billion. inefficient delivery of care. and the point being, during the health reform debate, we were talking about hey let's put the healthcare system on a diet. let's cut the waste, the fat that's marbled throughout the system and then you won't have to raise taxes. you won't have to do medicare cuts because of 750 billion dollars covers the 716 billion in medicare costs that are on the table stretching over ten years. so this 750 billion dollars by the way is 30% of the cost of the entire healthcare system. that's what the institute -- [talking over each other] >> what the institute of medicine is saying look we have to get everybody to the table again. we have to say to ourselves how are we going to stop this? because there's also overcharging in the system. when you have more people coming
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in to the system, you can imagine there's incentive to keep those costs down. david: each side has their own way of doing it. the romney side would like to give more freedom to individuals, give people -- they don't like to use the word vouchers but give people a bit of what is spent now and allow them to spend money where they want. the president would have these panels decide which is necessary and which is not necessary, in terms of medical treatments. so both sides have their own way of dealing with this, but they are just -- you know -- [inaudible] -- in terms of coming up with a compromise. >> it is the institute of medicine saying it. we were talking about this throughout the health reform debate. cut the waste out first. now you have a big player down there in washington, d.c. saying wait a second, we've got to look at this again before health reform kicks in. that's the serious issue that we're looking at. liz: liz macdonald, thank you. >> sure. david: good stuff. liz: have you heard of this company, air castle? the ceo says europe's banking problems have been great for his
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business. how does that work? yes, you heard us correctly, helping his commercial aircraft leasing company and a lot of airlines are going to him. he will tell us why in a fox business exclusive. that's next. david: also, if you like driving really fast, there is now a highway in texas where you can do just that legally. you want to know where this is. we will tell you coming up.
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david: and it is time for a quick speed read of the some of the day's other headlines. check the core board. put it up. put it up. look at this. we're tied. five stories one minute, first up delta air lines looking to buy cheaper north dakota oil from
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pennsylvania reducing amount of imported crude. they plan to transport the north dakota oil to the refinery by train. apple is cutting memory chip order from samsung for the iphone five. competitor samsung has been one of apple's biggest component suppliers for iphones and ipads. twitter is expected to beat facebook in mobile ad revenue. estimated report twitter will earn $129.7 million in mobile advertising compared to facebook 72.7 million. president jimmy carter set longest record for post-white house career. he worked for the none for profit carter center. watch out drivers. texas has the country's highest speed limit of 85 mile-an-hour. the 41-mile toll road will be between austin and san antonio. i want to get there. that is today's speed read.
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[buzzer] liz: i was hoping you would blow that. david: i almost did. take it away. liz: the sluggish global economy is not stopping one airline leasing business from taking off. aircraft sell is taking advantage of playing the european debt crisis to its advantage. joining us in a fox business exclusive the aircraft sell ceo. this really caught our eye. european banking crisis is positive for you guys. explain to our viewers how. you are a publicly-traded company and people are always looking for something to invest in. >> liz, 100 dal billion in aircraft will be delivered this year and the shrinkage in the european bank market means somebody has to fill the gap. liz: meaning financing? >> exactly. liz: people go to the banks to finance because these things are not cheap. >> they're not. this year so far we put $700 million in commitments in place in terms of new investments. that was target at beginning of the year we hit that halfway through. we're excited about that.
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great time to invest providing you have a way of financing yourselves and we do. we tapped into the capital markets in the u.s. and we have been repeat issuer. it is a good time for us. liz: on the screen are some of your clients. klm, iberia. us airways southwest with, air canada is in there. why rent versus buy? >> same way you might want to lease a car. you may not have the money and take the residual risk. same thing with airlines. whether you're like a strong airline like cafe pacific like one ever our customers. we give you financing flexibility. liz: so you have so many fingers in so many different parts of the globe when it comes to some of these airlines, where do you see stronger regions? >> the growth in our businesses come from emerging economies. it changed as the face of travel totally. in fact about two years ago, asia eclipsed north america as the most traveled sector in the world. and that's a shocking factor
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a lot of people. about a third of the deliveries have gone into china and near term areas. so we see big growth in asia. we see good growth in brazil. in southeast asia in particular. we see good growth in turkey. liz: where are the weak spots? >> weak spots are in europe. europe has been weak for some time. the good thing about airplanes they're portable. they're long life assets like real estate. if you're a landlord you can't move your aircraft somewhere in the world where demand is good. our portfolio shrunk in europe and increased in asia. liz: you took a plane can't afford to be used in europe and send it over to singapore? >> our job is find highest and best use of aircraft across the globe. liz: there are four other companies that do this, we can put some of the competitors up there. here is your stock. trailing pe is also very
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inexpensive it is about eight. we look to look at cheap stocks not too expensive for people to get in as far as the barrier to entry is concerned. we ask because nothing is guaranteed. you have a dividend that you pay out. it is a pretty good one, about 5%. >> yeah. liz: what would force you to either cut it or suspend it? because we saw that during the financial crisis where if ge had to be forced to do something like that, we always like to ask that people are getting into certain stocks like yours because of a positive dividend. >> conservative capital structure is an important starting point. we have very low leverage. two parts debt to one part equity. we have no debt maturities for five years, none. and our philosophy is to pay a sustainable dividend where, as we grow, we'll share in that growth in terms of the dividend. liz: i bet it helps a lot you have the b. and economics from wharton, right? >> it helps. that is a good school but the real world is a good school. liz: is the fed going to
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move? i have to ask you as a business owner? >> i think there is still a lot of uncertainty in the economy. that is one of the overhangs in all businesses around the world. anything that gets confidence going is important. liz: always. ron shaw is the air castle ceo. thanks for joining us here exclusively on fox business. david: this morning's job report fueling the argument that the economic recovery is anemic at best. we have latest details what it could mean for the election live from the campaign trail. iphone, ipad, ipod. could i-radio be next? we have reaction from the ceo of a the world's largest on demand streaming service. that is coming next. [ male announcer ] this is the age of knowing what you're made of.
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indexes ending the week on a high note. the dow held on to yesterday's 240 point gain and finished higher at 13,306 that is a new high since december '07. american international group raised 2 billion in a stake in a-1 group. aig will use the money to buy back $5 billion of its stock from the u.s. treasury. that will reduce the company u.s. hold in the company below 50% since the taxpayers bailed out aig in financial meltdown. videogames extended a slide. research firm npd group, consoles down 20% from august a year ago. latest from fox business. power to prosper and all that now we need a little bit more... a little bit more vanilla? this is great! [ male announcer ] at humana, we believe there's never been a better time to share your passions...
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tops the list of issues for the debate. liz: joining us now fox business's rich edson in washington, d.c. and fox news's ed henry in iowa city on president obama's campaign trail. first let's go to rich for the republicans response to the jobs data. >> well, liz and david we'll go to the top of the ticket. governor mitt romney called this morning's jobs report the hangover to last night's presidential convention speech party. republicans point to yet another moment of job growth falls short in keeping up with increases in population and lowest participation rate in the workforce, 63 1/2%, in a generation. >> for every net new job created about four people dropped out of the workforce. so we're going in the wrong direction. this is a very difficult time for the american people. by the way, wages are also not rising. so no increase in wages, declining wages, actually, declining number of people being able to find work. people dropping out of the workforce. it is another continuation of very bleak news on the
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employment front. >> as for how to address jobs in washington, the president wants congressional republicans to sign off on his jobs proposal including more federal money for teachers, police, firefighters among other things. pub be -- republicans call that more stimulus. congress is back next week. as far as when they deal with all the fiscal issues, that's after the election. back to you. david: rich, thank you very much. now for a very rare appearance on the fox business network. we don't see him here all the time so pay attention, folks because we love this guy. ed henry following democrat reaction to today's report. ed? >> great to see you. the president realizes this is far from being good enough. as he delivered a acceptance speech last night he had the goal of saying he would create a million manufacturing jobs if he is reelected over next couple years. turns out as you know better than anyone, manufacturing hit hard in the august jobs report, first time a year we saw loss in that sector. it has been a hero of the
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recovery all along. that really embarrassed the president today, coming so quickly after the convention. what he tried to do is focus on some of the positives over the last couple years but admit this just failed. take a listen. >> today we learned after losing around 800,000 jobs a month when i took office, business once again added jobs for the 30th month in a row. a total of more than 4.6 million jobs. [cheers and applause] but, but that's not good enough. we know it's not good enough. we need to create more jobs faster. >> now the other issue obviously whether or not the president is going to get a bounce out of his convention in charlotte. they feel very good inside the obama campaign in chicago from talking to senior advisors, look, they had very well-received speeches by former president bill clinton, first lady michelle obama, vice president biden firing up the crowd.
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they're hoping to get some sort of a bounce. in fact when you talk a political analysts they say after that jobs report will be hard. >> bad jobs number like this one did sort of undermines his argument and throw as wet blanket over his convention coming out of the convention heading into the general election, no question. >> senior white house advisor david plouffe told us today, david plouffe is the senior white house advisor, if not a bounce there is momentum coming out of the convention. that is in doubt because of this jobs number. vice president biden last night introducing the president suggested in his words we have turned the corner. this jobs report obviously raising some questions about that as well, david. as much as i like you david, only reason i agreed to do this is pause of liz. david: isn't that nice. liz: ed, i was so jealous david got to talk to you. hello, ed. david: never coming back, ed, never, never. >> when you're on vacation liz will have me.
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liz: rich is sitting there going, hey what about me? >> what's wrong with that? >> love you liz. david: don't be a stranger, both of you. liz: thank you, rich. pandora beware. david: pandora beware because apmedical -- apple may be looking to take a bite out of the online radio industry. liz: we have one city, one city in the u.s. imposing a band likely angering poland, spring and fiji water. we'll talk about that ahead on "after the bell.". ♪
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david: well the w -- "wall street journal" says apple is in talks to license its own customized radio streaming service to rival pandora and a lot of other online music service. >> we have the director of international portfolio manager at riverfront investment group. his group owns shares of apple. we have the owner of online music service, groove shark. sam, you're not publicly-traded but pandora is and their stock took a
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hit on this news. did it put the fear in your heart to hear apple may enter your space? >> obviously apple does a lot of things very well. there are tons of competitors in this space. pandora and in the last 10 years there has probably been a list of 100 people come and gone in this world. by no means trivial to do anything in the music best. business. apple is does what they do well. our office is all apple computers. i don't doubt they will carve out their niche in the space. david: chris, let's talk about pandora as we look at the gloomy chart. looks like pandora, the stock, was getting on its feet after pretty tough 12 months. pretty tough after issued ipo they were finally getting there and then this happens . is this a fatal blow to the stock or can it make a comeback? >> it's a good question. in full disclosure, my firm doesn't generally research companies that have less than a five-year track
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record of being publicly-traded so pandora is a stock i look at not nearly as much as say apple which we owned for a long time. i think it is a little bit premature to judge so harshly because we don't know what apple's plans are in the space. we have seen the headlines. we don't have any details. fingerprints, if apple came out with a program with subscription based service with cost, pandora the base service is free, at least the service i use is free they may not necessarily be direct competitors. so i think it is probably a little bit premature to judge the impact that it is going to have on a company like pandora. certainly the market tends to shoot first and ask questions later which is why i think you're seeing a such a harsh reaction. pandora has some things going for it. primarily they have decent first mover advantage in the space and they have done good things as far as i know with licensing to the automobile manufacturers, et cetera and it's a product
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people like to use. i'm a consumer of both groove shark and pandora on my apple products and i find both services are of a great value to me as a consumer. so i just think it is probably premature to judge. liz: sam, there is one much your customers. that's awesome. you have 30 million active users every month and your mandate as it says to help bridge the growing gap between artist and consumers. you want to create for consumers an opportunity where they can listen exactly to the music they want. here is where i would get nervous if i were you and tell me why i'm wrong if i am. apple already has the music on itunes at its fingerprints. could they wipe you out and spotfies in the world if they got their act together. >> for sure there are different business models in the space. we're app supported free business along what youtube is doing. we're creating artist pages along the lines what myspace was doing. the difference here there is
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tons of subscription businesses when. we say streaming service that is a very broad category, that they can be talking about a music subscription service more along the lines of spotfy and rhapsody have done. but without specifics what apple negotiating it is hard to say. there are tons of different streaming services with tons of business models. it would be hard, they are a billion dollar a year business. hard to cannibalize that for a free service overnight. >> chris, pull back and look at apple here for a second. it may be possible that they could actually own every single piece, every single segment of the home entertainment business. it is possible they could but is it reasonable? when you think of the folks down in washington worried about monopolies and such might somebody step in to stop that? >> i think it is very reasonable to expect that apple is going to be a huge player in what we call the digital living room. i think that's one of their implicit goals is to own
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that space and i think out of any tech company that research i think they have the best shot at doing it. they have by far the best user experience of any hardware company that i know of. and they have done so much in terms of their ecosystem, in terms of linking all the different devices together, linking content together, with the hardware, just making it work seamlessly. so you don't have to be tech guru to get the products to work. so i wouldn't bet against apple in terms of owning that digital living room and that's precisely one of the reasons we've been long the stock for as long as we have. liz: sam, apple tend not to make lots of acquisitions and when they do they're very laser focused but if they came to you, i know you're only 25, this would be maybe a dream or not if you want to keep running groove shark and came to you we want to buy you, what would you say? >> hard to say. i'm here in this business to change how artists and consumers interact. if it went along with the vision there would be a conversation to be had there. everybody looks at apple a
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behemoth and everything they go into is suddenly successful. they have a lot of failures. their pink service on i tunes hasn't had the success. when it comes to nailing social they haven't had social on other products. make great hardware, make great software and user experience makes them formidable. at the same time social and content in terms of bidding content those are areas they're not really into yet. david: this isn't fair to my producers because they're giving me a wrap. chris, is it possible apple might buy pandora, quickly? >> quickly? it's possible. i'm not sure that it is probable though because i think their history has been to do smaller, more niche acquisitions. so i suspect this is something that they would either make a small are acquisition or probably, more probably build in-house than to do a multibillion-dollar acquisition. david: certainly a very exciting element of the entertainment industry.
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thanks very much. chris river front investment and sam tarantino. groove shark. good to see you guys. liz: students at one well meant tri school won't need to use the dog ate my homework excuse anymore because there isn't going to be any homework. we'll take you off the desk. where is this happening next? david: we'll tell you three things to watch next week that could move your money. that's next. ♪
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well, would you look at the time... what's the rush? be happy. be healthy. david: time to go off the desk. this could be bad news for poland spring. one town in massachusetts is banning sales of plastic water bottles. first time offenders get a warning. second offense gets $25 penalty and get charged 50 bucks for every fraction. don't worry there is exemption for emergencies. liz: off the desk. could be a child's dream becoming reality. a school without homework? yes. an elementary school has abolished traditional homework like work sheets and math problems. applause. they are asked to read a book for 30 minutes a night. the experiment says the principal is helping students become more mature and motivated. david: exchange books for tvs. that will happen eventually. time for three weeks to watch next week.
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this was busy week. next week we have some busy things going on. number three, retail sales set to be released on friday. number will give us insight how the american consumer is holding up as the economy continues to slow down. consumer spending accounts for more than 2/3 of economy. that is misleading because you have to produce first anyway. liz: david, we've been talking about apple a lot but apple will hold a special event on wednesday. they are expected to announce the highly anticipated iphone 5. they don't expect any details on the mini ipad. it kicks off at 1:00 p.m. eastern. david: do you have a iphone? we have two in my house but don't carry one. number one thing to watch next week. this guy will do it again. federal reserve meeting what his decision, comes out on thursday. usually comes out on wednesdays. this time comes out on thursday. investors hope ben bernanke will announce another round of stimulus. it doesn't stimulate anything. i call it money printin